There are 25 resource-rich countries, where mining and/or petroleum sectors are significant contributors to the economy, government revenue, foreign exchange and employment, in the Commonwealth.
The 25 resource-rich Commonwealth countries
*Significant oil and gas discoveries
A surge in demand for minerals
This number is set to increase within the next decade given the surge in demand for minerals (such as cobalt, copper, lithium) required for renewable energy technologies, and the development of oil and gas discoveries in many countries.
The importance of natural resources to Commonwealth countries
These natural resources are of particular importance to member states. For instance, all 21 Commonwealth countries in Africa are actively engaged in these sectors, and more than 60 per cent are resource dependent – that is, natural resources contribute more than 40 per cent of exports or 50 per cent of government revenue, or natural resource rents constitute more than 10 per cent of GDP.
Natural resources are also of particular concern to many small states and Least Developed Countries (LDCs), as resource dependency is an added source of vulnerability to exogenous shocks and environmental disasters. Currently almost 30 per cent of small states and half of LDCs in the Commonwealth are resource dependent, and this is set to increase in the near future.
Introduction
Commonwealth countries rank as major producers of natural resources including gas and oil, minerals and precious metals such as gold, diamonds, platinum and copper.
Effective management is essential for limiting climate change and achieving the sustainable development goals.
Climate and environment
The mining and petroleum sectors are significant contributors to global greenhouse gas (GHG) emissions. Achieving the goals of the Paris Agreement will require acceleration of mitigation efforts given the widening emissions gap. Effective policy and regulatory frameworks governing these sectors’ GHG emissions are extremely powerful public policy tools for addressing the global climate crisis. The petroleum sector is a particular area in which, with targeted support, significant reductions can be achieved. For example, methane reductions of 70 per cent can be achieved with existing technology alone.
The large footprint and poor practices of projects can contribute to pollution, ecosystem degradation and loss of biodiversity. For example, mining is responsible for around 7 per cent of annual forest loss in developing countries. Robust regulations and enforcement is needed to minimise these impacts.
Development
In the face of compounding crises, many governments are looking to these sectors to provide foreign exchange and revenues to, for instance, finance development needs, service debt, and deal with the loss and damage of climate change. If wisely managed, natural resources can lead to economic growth and poverty reduction. However, most resource-rich countries underperform on social, environment and economic measures, and have high levels of corruption, inequality and conflict. Good governance is recognised as instrumental to avoiding this ‘resource curse’ and generating positive development outcomes. 7
Just energy transition
Each country’s energy transition pathway will reflect its national policies, circumstances and nationally determined contributions under the Paris Agreement. The global energy transition also has additional risks and opportunities for mining and petroleum producing countries. Good governance is important to ensure policy coherence, minimise economic and social disruptions, avoid stranded assets and maximise benefits from the circular economy and new value chains.
The effective and transparent management of natural resources can, in many countries, provide a cornerstone of climate-resilient, inclusive sustainable development which can improve the prosperity of all citizens.
Introduction
Natural resources have multifaceted and oversized impacts on climate, energy, environment, ecosystems and socioeconomic development.
